Senate OKs Bill on Secret Settlements

Heavily lobbied legislation that would open to public inspection out-of-court settlements involving cases of defective products, environmental hazards and civil fraud was narrowly approved Thursday by the Senate.

The action handed a big defeat to the California business and manufacturing establishment, whose representatives argued the bill would drive more employers from California. It also gave a sweet victory to consumer advocates, environmental protection activists and personal injury lawyers.

As platoons of lobbyists for both sides of the issue jammed the hallways outside the Senate chamber, the bill by Sen. Bill Lockyer (D-Hayward) was approved on a 21 to 16 vote, the exact majority required to send it to the Assembly.

Proponents of the bill charged that the current system unfairly allows the details of out-of-court settlements to be kept from the public through confidentiality agreements, information that is important for Californians to know so they can protect themselves against threats to their health, safety and welfare.

Opponents, whose roster includes petrochemical companies, pharmaceutical firms and other manufacturers, banks, physicians, insurance companies, agricultural interests and others, voiced fear that the bill would expose trade secrets and other private information to competitiors. Lockyer said the bill guards against the release of such information.

Lockyer also asserted that if such legislation had been in effect years ago, the public welfare would have been better protected. As examples, he cited current controversies over the safety of silicon breast implants, artificial heart valves and the exposure of workers and school children to asbestos.

In out-of-court settlements involving product liablity and environmental hazards, Lockyer said his bill would enable Californians to “make informed decisions about their own personal health and safety.” The bill would not affect other kinds of civil cases.

Displaying a plastic breast implant and a defective heart valve, Lockyer denounced as “slogans without evidence” the opposition of business to his bill.

But Sen. Frank Hill (R-Whittier) asserted that the bill threatened to inflict higher legal costs on recession-battered businesses and would cause California employers to move to more favorable states. “In the guise of protecting the consumer, what we do is we take away what is most precious to the consumer: a job, a paycheck, the ability to make a house payment,” Hill said.

Sen. Nicholas Petris (D-Oakland), however, an outspoken advocate of tighter restrictions on the application of pesticides and other farm chemicals, countered that tens of thousands of employees unknowingly worked at jobs where the management knew “those men were doomed to die.”

“I don’t want those kinds of jobs,” Petris told Hill.